Contents

Section 1: Background and proposals

The purpose of this consultation is to seek views on various
options which will ensure that the fees raised in our civil courts
cover the cost of the civil business undertaken in those
courts.

The Scottish Government is committed to ensuring that the courts
are funded to deliver a civil justice system that is accessible,
affordable and which provides a high-quality service to those who
have cause to use it.

Beyond this overriding objective the Scottish Government
believes that the fees charged to court users should recover the
cost to public funds of providing those services. This means that
those who make use of the services of the courts should meet, or
contribute towards, the associated cost to the public purse where
they can afford so to do.

The responsibility for setting court fees is a matter that is
reserved to the Scottish Ministers and is put into effect by an
Order laid in Parliament. Those Orders establish statutory
fee-charging regimes, which the Scottish Courts and Tribunals
Service (
SCTS)
administer.

The policy of successive governments has been to move
progressively towards a position of full-cost recovery whereby 100%
of the costs of the civil justice system are met by fees. However,
other than regular adjustments for inflation and the addition of
the occasional new fee, it continues to be the case that fees have
only partially met the costs of the system.

Each year the total costs attributable to civil business in the
sheriff court, Court of Session and Office of the Public Guardian
are set out in the
SCTS Annual
Report and Accounts along with the income derived from fees. The
following table shows the overall figures for the last 5 years and
the recovery rate achieved:

Table 1: Recovery rate 2010-11 to 2014-15

Income (£m)

Costs (£m)

Deficit

Year

Fee income (net)

Fee exemptions

Total fees

Total costs allocated

Planned subsidy

Net costs

Deficit/ surplus (£m)

Recovery rate

2010-11

22.8

2.3

25.1

41.7

6.5

35.2

-10.1

71%

2011-12

22.1

2.0

24.0

41.2

7.4

33.8

-9.8

71%

2012-13

21.9

2.2

24.1

38.8

6.5

32.2

-8.2

75%

2013-14

24.2

2.4

26.6

39.5

6.2

33.3

-6.7

80%

2014-15

24.7

2.3

27.0

38.4

6.1

32.3

-5.4

83%

Scottish Budget 2016-17

Decisions regarding court fees are taken in the wider context of
the Scottish Budget and the continued challenges posed by pressure
on public finances. The Deputy First Minister noted in the
introduction to Scotland's Spending Plans and Draft Budget 2016-17
[1]:

"The setting of this budget has, however, taken place against
the backdrop of the toughest public expenditure conditions we have
yet faced. Conditions imposed by the
UK Government out of
choice, not necessity.

"The
UK Spending Review
published last month made clear that public expenditure in Scotland
will face year-on-year real term reductions until the end of this
decade. This means Scotland's budget will continue to fall and by
2020 it will be 12.5 per cent lower in real terms than when the
Conservatives came to power in 2010. This is the equivalent of one
pound in every eight we spend being cut by Westminster by 2020.

"This imposes acute challenges on day-to-day spending."

Against this backdrop, the Budget reduced the operating budget
for the
SCTS from
£79.9m to £76.5m. The vast majority of the income
generated by
SCTS comes
from court fees.

It is therefore proposed that, in order to reduce the impact of
budgetary constraint, court fees should rise in line with the
stated policy of full cost recovery. Given that this is the policy
of the current and previous governments, an increase in court fees
is seen as the best course of action rather than reducing the
budgets in other Justice areas to offset this reduction in
SCTS's
budget.

Court fees review

Court fees have generally been reviewed every three years, with
the last round being implemented in 2015. However, the Scottish
Government has decided to accelerate the move towards full cost
recovery to ensure that the courts are properly funded and able to
continue to provide access to justice whilst, at the same time,
contributing to the ongoing development of a more efficient,
modernised court service. The wider context of pressure on public
finances, brought about by significant reductions to the funding
Scotland receives from the
UK Government, means that
the Scottish Government now considers that the time is right to
take the last step towards full-cost recovery.

A review is justified both by the need to end the cost to the
public purse of subsidising the civil justice system, and by the
introduction of the new simple procedure which replaces the current
small claims and summary cause procedures. Simple procedure is to
be introduced from 28 November 2016 and it is the intention of the
Scottish Government to bring in new tables of fees with effect from
that date.

2015 Court fees review

Fees were last reviewed in 2015. Broadly the proposal was for
fees to increase by 2% to account for inflation for each year
2015/16 to 2017/18. In addition an extra 2% increase was proposed
from 2015/16 to assist with the costs of modernising the
IT systems that
underpin the justice system. Beyond this baseline some further
minor amendments were made in order to simplify and improve
consistency within the fee system.

The next review was scheduled to be undertaken in 2017-18.
However, due to the reasons outlined above, the Scottish Government
considers that fees should be reviewed now rather than waiting
until 2018.

2018 Fee Review

Irrespective of the result of this consultation, it is still the
intention for a fuller fees review to be undertaken in 2017-18.
This is seen as an opportune time to re-evaluate how fees are
calculated and charged owing to the reforms that will have been
implemented as a result of the Courts Reform (Scotland) Act 2014
and the introduction of a new
IT system in the
SCTS.

The Scottish Government does see scope for further improvements
in the fee charging structure. For example, increased automation
flowing from a new civil case management system and consequential
digitisation of fee transactions and fee exemption transactions
will result in increased transparency. This improved understanding,
deriving from availability of robust information, may allow further
changes to improve fairness and public confidence in the fee
charging system.

Opportunities to be further explored would be to offer discounts
for on-line submission of court documents and a simpler structure
of single 'front-loaded' fees to replace a complex system of
staged, small fees being triggered throughout a case.

Simple procedure

Background

The Courts Reform (Scotland) Act 2014 introduces a new 'simple
procedure' to replace the existing small claims and summary cause
procedures. It was thought that there was no longer justification
for continuing two separate procedures for cases under £5,000
(summary cause) and small claims (applicable to actions up to
£3,000).

Simple procedure is designed to be a speedy, inexpensive and
informal civil court procedure for helping people sort out
disagreements about matters of lower monetary value. The Court of
Session has made the Act of Sederunt (Simple Procedure) 2016 which
contains the Simple Procedure Rules drafted in a modern and
accessible style.

It is intended that simple procedure should be implemented in
two phases. The first phase is due to come into force on 28
November and will comprise (principally):

proceedings for the payment of a sum of money (but not
proceedings for aliment or personal injury); and

proceedings for the recovery of moveable (but not heritable)
property.

A second phase, scheduled for 2017, will deal with

housing cases;

personal injury cases; and

a number of more minor procedures that are less commonly
used.

Simple procedure fees

The implementation of simple procedure will require the
replacement of the existing court fee arrangements for small claims
and summary cause actions by a new unified structure. It is
proposed that the existing fee levels for summary cause and small
claims actions will be retained within the new simple procedure
structure. The level of fees paid for particular actions would
therefore remain unaltered. For example, proposed fees to lodge a
claim up to £200 under simple procedure will be £18 and
to lodge a claim up to £5,000 will be £78. If, as a
result of this consultation, these fees change, the new fee for a
simple procedure case will be the same as it would have been if a
case had been raised under the small claim or summary cause
procedures.

We believe that maintaining the existing fee levels in the new
structure will assist the introduction of simple procedure,
particularly in light of the phased implementation, by providing a
degree of continuity as the new system beds in.

Exemptions

Whilst the Scottish Government believes that the costs of the
civil courts should be borne by court users rather than by the
taxpayer, we are committed to ensuring that there is protection for
those who are unable to pay court fees. This protection is provided
for by a generous and extensive range of exemptions that are
offered to those on lower incomes. The exemptions regime ensures
that civil court users with limited means are not being denied
access to justice.

The majority of those who qualify for exemption do so because
they qualify for legal aid. The full range of exemptions is listed
below.

You may be entitled to exemption from paying court fees in the
following circumstances:

You or your spouse/civil partner are in receipt of:

income support;

income-based employment and support allowance;

pension credit guarantee credit;

working tax credit, including child tax credit and gross
annual income used for calculation of tax credit is £16,642
or less;

working tax credit, including a disability element and gross
annual income used for calculation of tax credit is £16,642
or less; or

working tax credit, including a severe disability element and
gross annual income used for calculation of tax credit is
£16,642 or less.

You are in receipt of:

income-based jobseeker's allowance; or

Universal Credit (from 29 April 2013)

You may also be entitled to exemption from paying court fees
if:

you are receiving civil legal aid in respect of the matter
for which the fee is payable (Section 13(2) of the Legal Aid
(Scotland) Act 1986 refers);

the fee is payable in connection with a simplified divorce or
dissolution of civil partnership application and you are
receiving advice and assistance from a solicitor in respect of
that application (Legal Aid (Scotland) Act 1986 refers); or

the fee is payable in connection with work being undertaken
by your solicitor which qualifies for civil legal aid as matter
of 'special urgency' (Section 36 of the Legal Aid (Scotland) Act
1986 refers).

The Scottish Government is not making any changes to exemptions
as part of this review. However, consideration will be given as to
whether the £16,642 figure noted above is still
appropriate.

We also note the rolling out of the new system of Universal
Credit and the powers over welfare which are being devolved to the
Scottish Government. In time these developments may mean that
further consideration of fee exemptions is required to ensure that
they remain appropriately designed and fit-for-purpose.